Whilst this decision not to allot fund managers and funds SIFI status, once confirmed, should provide a fillip to the sector, the aggregate reputation of asset managers remains somewhat below par. There are signs that the industry is learning from recent regulatory battles, the SIFI scuffle being headed off relatively quickly (but too slow for some). This is no reason for complacency. Critics continue to feel that industry still seems too remote from the outside world, forever brokered by 3rd parties with no guarantee of alignment of interests.

Part of the challenge is that the industry, overall, continues a bias towards product promotion over reputation management, suggesting that some rebalancing is called for. Industry reputation is not the preserve of trade associations and the larger groups, but effectively is a mosaic created by all the sector participants relative to their own visibility at any one time.

Another consideration is whether industry divisions based upon what are effectively decreasingly differentiated product types – hedge funds, private equity, mutual funds, ETFs, and so forth – continue to be either helpful or relevant to the underlying investors. During the financial crisis each of these sectors declared their innocence from its causes in turn, along with the fact that they weren’t banks, to be met with a huge wall of indifference by the outside world. Convergence has long been a topic in the industry but, on reflection, what this reaction told us was that to everybody on the outside this convergence had already happened. Furthermore, as banks are coerced into cultural change – although whether that regulatory framework remains in situ remains to be seen – they can develop a reputational advantage over asset managers if they do not respond in kind.

But this potentially changes the dynamic between asset managers, asset owners, borrowers and investors, particularly when the last two categories turn out to be the same organisations (or even individuals). For the time being, with economies recovering, default rates improving and the demand for yield undiminishing, this looks like a win-win. But like everything else, markets and sentiment can turn, and the impact of this change in the dynamic has yet to be tested by any sort of credit squeeze. Which is why investing in your reputation now may yield its own return in the future.